With reference to Banking, which among the following is / are correct statements about Demand Deposits?
1. Money in demand deposits is liquid
2. All demand deposits earn interest
3. Ownership of demand deposits can be transferred using a cheque
Select the correct option from the codes given below:

Answer: [C] Only 1 & 3

The money as demand deposit is liquid and can be encashed at any time. The ownership of demand deposits can be transferred from one person to another via cheques or electronic transfers. There is no fixed term to maturity for Demand Deposits.  The demand deposits may or may not pay interest to the depositor. For example, while we get an interest on savings accounts; no interest is paid on current accounts.

This question is a part of GKToday's Integrated IAS General Studies Module